Quick MI today!
ADP jobs report came out today showing a loss of over 473,000 jobs for June...yikes. We will see the official jobs report tomorrow which may move the market. WE are expecting a terrible showing and if the report comes in better than expected...even if still "bad" the markets could move. With "good" news: money moves traditionally towards stocks...and away from the bond market which means higher mortgage rates potentially.
The FNMA 4.5% closed the session today at $99.88 which was up 19 Bps from this morning's reading...and up about 40 bps from where the bond was trading when rates came out this morning...so rates got better this afternoon. By "better" we recovered some of the loss from this morning's worsening and are in the 5.25% range for the 30 year fixed.
China put out manufacturing numbers today and showed that they are continuing the 4 month growth spurt that signals an increased demand for their goods in the world. Perspective: we are all in this together and the "economic slowdown" is global. Remember that China has been accused of "keeping the value of their currency low..." This keeps their goods affordable to the rest of the world. If the YUAN was stronger against the Japanese YEN for instance...the Japanese economy couldn't purchase as much of the product from Chinas manufacturers when the "YEN" was converted into "YUAN."
HUGE non-surprise: California is out of money. They will be issuing "IOU's" to cover their bills in the short term...close to 3 billion worth. For those of us with ties to the state: our "insiders" called this one years ago as the commitment to increased spending was not matched up with revenue increases. It is unfortunate to see such a great State with the 8th largest economy in the world if it were a country suffer as it is. Check out the article if you would like more insight: http://hosted.ap.org/dynamic/stories/U/US_MELTDOWN_101_CALIFORNIA_BUDGET?SITE=OHCAM&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2009-06-30-17-09-05
Happy Day!
Chad
